Perhaps the biggest criticism of Olympus' Camera Division over the last 2 years has not necessarily been a lack of products, but more the lack of any structure or strategic direction. For a while it seemed the company was going nowhere with its DSLR's and Zuiko Digital lenses and many users and fans were worried that this once cutting edge company would simply disappear. The Four-Thirds philosopy seemed to be melting away like so many of its promises.

And yet during this time Olympus proved that 4/3rds CCD's above 5MP were possible and moved into the 8MP arena with the E-300. The design had a cool reaction and was generally held to be a bit on the ugly side. In an effort to address this the company brought us the E-500 and in a stroke put itself back on the rails with the cameras 'traditional' looks alongside a very high level of control and user features.

In a flurry of further development Olympus announced another 'world first' with the E-330; a DSLR with the viweing advantages of compacts - i.e. Live View and highly sophisticated macro pre-capture viewing.

But the flag-ship E-1 professional unit was still not replaced leading some to conclude the company were likely to abandon this level of committment and concentrate solely on the entry and mid level markets. And yet the lens Division continued, more or less, to produce some remarkable optics in line with the famous ROAD MAP, some of which are obviously designed for the professional user. What was happening?

Levels of anticipation were palpable as PhotoKina 2006 approached as everyone expected the E-3 to be announced. In the event no such thing occurred and we were given only a look at the mock-up of the new pro-level camera.

However, Olympus quietly announced a new consumer grade DSLR - the E-400, heralded as the worlds smallest and lightest DSLR and while it was welcomed for its 10MP CCD and new generation of small & light 4/3rds lenses I think the pundits have missed the real significance of the E-400.

SO, WHAT'S IT ALL ABOUT THEN?

As a long time Olympus user, collector, writer and observer, it strikes me that history is about to repeat itself. Look back to the late 1960's and early 70's and remember those huge and clumpy SLR's with whacking great mirrors slapping around inside and with lenses that resembled canons and bazookas rather than optical instruments. And then remember what happened when a certain Japanese designer completed 6 years of painstaking design and stunned the photographic world with the diminutive OM system. The OM1 changed the world. I don't care where your affiliations lie because every other camera maker had to go back to the drawingboard to try and match the Olympus Masterpiece with their own smaller and neater SLR. Maitani had done what many thought was impossible, he miniaturised the 35mm SLR and every manufacturer had no option but to copy it.

I genuinely believe the desire to reproduce the philosophy that underpinned the OM system was one of the driving forces behind 4/3rds. But I also think it proved a damn site harder than anyone at Olympus thought. For once the fundamental decision about sensor size was made, there's no going back. It is literally do, or die. Do not think for one moment that the meeting rooms at Olympus were not filled with every single argument that's subsequently arisen about the choice of sensor. They knew then, as they know now; the die was about to be cast, and cast it was; and the devil take the hindmost.

With the 4/3rds decision made the whole system (small though it was) had to be built. No doubt Olympus pulled in designs and techniques from past products like the E10 & E20 and the lens makers were re-challenged to match optical performance with the new sensor. It is easy to see the heritage of the E-1 design and function and there will have been compromises made along the way to transform the 'closed' E-series cameras into an 'open' and full blown DSLR system. The decision to open up four-thirds as a 'standard' was monumentally brave (or foolhardy), though now, some four or more years later Olympus is beginning to see the friuts of their wisdom.

There have been massive problems to overcome. The pace of the digital revolution took Olympus off-guard as 5MP was soon overtaken. Full frame sensors arrived sooner than anticipated. Promised technological solutions to CCD noise issues proved evasive. R&D was very expensive and the E-1 was not a commercial sucess. The camera division posts massive losses and for a while things looked bleak.

AND ALL THIS BRINGS US TO WHERE?

Imagine it brings us to a point about a year ago. It is a natural consequence of a near failure that the body corporate looks in on itself. This has happened at Olympus, no doubt. The new CEO insists that new products must sell, or else. Panasonic is looming. Someone at Olympus has to set a strategic direction to demonstrate it has a future. There's nothing like a near disaster to focus the collective mind.

We'll never know who the strategist was or is, but both a wide and narrow view has been taken. Wide in the sense that there is one major battle to win, that of levering in the viewing advantage of the compact camera into a DSLR body; and narrow in the sense that 4/3rds is NOT delivering on the promise of 'small'. You can almost hear the thoughts; "once we solve the live-view issue we can look in at the whole 4/3rds philosophy and start to really make it work." That Panasonic appears to have resolved the increased MP problem and Leica has brought fresh thinking too is fortuitous.

The E-500 is introduced and things start to improve. There is a message there - traditional design, smaller machine and good specification sells well. However the E-330 must be brought on as it resolves one of the major technical issues even though the E-300 on which it is based proved unpopular.

E-1 replacement? No not yet. There is too much strategic work going on. Where does 4/3rds go now? It goes smaller, that's where. The E-1 is based on older designs and thinking. Olympus needs a fresh direction, a strategy. Four-thirds = small and smaller still. Olympus must bring on the true 35mm SLR replacement, the true digital OM1. It's what a huge amount of traditional Olympus users are waiting for. It's what the home market is clamouring for. If they can do it the four-thirds future is assured, for at the moment it is nothing other than a cropped sensor also ran.

With some major headaches behind them, the strategy is tightened. Think small! Rather than focussing on a new pro-level camera that will absorb thinking space and time and not bring in big revenues, Olympus concentrates on direction first, then detail. That direction has already been determined; the design team concentrate on a 35mm SLR in digital form and function and produce the E-400. It is the first true digital 35mm SLR.

E-400 - SO WHAT?

To my mind, and if what has happened is something like the above scenario, Olympus once again have shown great courage. It might have been easier to have brought on a new E-1 or an E-1n with an 8MP CCD that temporarily satisfied the baying mob. But I'm convinced Olympus knew four-thirds was in grave danger and required a complete re-think. The fruits of that brave move are here with the E-400. In a recent interview with DC Watch, a popular Japanese magazine cum Internet company, the head of Olympus design revealed some fascinating truths about Olympus thinking. What follows are Olympus quotes from that interview.

"In the sense of overall planning, we’d always had high hopes of introducing a smaller model separate from the orientation of the E-1 professional model. But at the initial stages, we had issues with electronic devices and batteries, and couldn’t feel sure that we would be able to compress it to the size we wanted. As a result, at the startup of the 4/3 system we emphasized the development of the E-1. From the second year, we began directing more development efforts toward the small system."

"The size of the format and Olympus’ own image was also involved, so certainly we heard voices from around the world for a smaller sized camera. Those voices were particularly strong from Japan."

"Our goal was the body size of the OM series. We gave long and hard thought about what would be necessary to make it same width as the OM when placed alongside."

"We worked this past year on figuring out how to arrange the necessary mechanicals inside the body. To that end, we redid all the internal parts, so there are no common components with any of the earlier E-system cameras. The mirror, shutter, viewfinder, all parts have changed. Even the dust reduction system was redesigned a bit smaller. So we reviewed all the parts and reduced all their sizes bit by bit."

"The original format size certainly had that advantage. But each component—the moving parts in particular—had to have a certain size to maintain reliability and performance. This time we were able to not only make the parts smaller, but also to shift all the components that had been outside more slightly toward the center (the mirror box), and while it may sound like blowing our own trumpet, we really feel rather amazed we were able to achieve this degree of compactness."

"When we began the E-system, we understood the need for a series of professional lenses that matched the E-1, and we fully understand the same with respect to the E-400. As I noted earlier, the E-400 will be a series that becomes the bedrock for a new generation of E-system cameras, so naturally, we will also furnish lenses to match it."

"But with the second chapter of the four-thirds saga, we have a structure that will never make anyone wait again due to model changes. We are strengthening our development resources as well, so we sincerely ask you to wait until next year’s PMA."

SO, WHAT'S NEXT?

I believe now the company has resolved some of its biggest technological issues and has a strategy to take them forward we will see a new breed of DSLR eminating from Olympus based on the 4/3rds small sensor in perfect combination with a small camera. The company's offerings will be better structured with several layers of choice from entry to professional levels in both bodies and lenses.

There will be three levels; basic, advanced and professional with the existing three levels of lenses reflecting this level of choice. There will be an enhanced range of 'blue band' lenses for the basic user, a slightly less (than current) selection of high grade lenses for the advanced amateur and the top grade lenses remaining for the professional users.

I believe the third party lens makers have already negotiated with Olympus and Panasonic as to which range(s) they will operate in and the Leica arm of Panasonic will offer choice to four-thirds users at the advanced level. There will be some sharing of the professional offerings to offset development costs.

What I can't understand is the strange decision to restrict E-400 sales to Europe only. I've heard the argument about manufacturing capacity and lack of 10MP sensors but don't believe it. It seems a foolhardy strategy to announce a groundbreaking camera and then to tell the world press that after an upgrade in 2007 it will be made available worldwide. I know Europe is the company's best sales area but are we daft enough to buy a camera that will be out of date in a few months? Or is it simply the case that the US is overstocked with E-500's and needs a few more months to shift them before the barnstorming E-400 appears?

And remember, the E-400 is the company's current flagship model. It is technically ahead of the E-500 and E-330 and no E-1's have been manufactured for 15 months, at least. If the new professional grade camera has the handling attributes and output of the E-1, melded with the reduced size and functionality of the E-400, Olympus will certainly challenge the bunch. It is definately not all about sensor size and MP counts; it's about understanding, courage and design thinking.

I have some really good feelings about Olympus just now. I think they are about to repeat Yoshihisa Maitani's legacy; albeit in a modest way.